Signet Jewelers posted another strong set of results for the second quarter of fiscal 2022 (ended July 31), leading the company to boost its fiscal 2022 financial guidance.
Comp sales for the quarter rose 97% from the same period last year, when many of the company’s stores were closed due to the COVID-19 pandemic. But they also rose 38.1% from the same period in 2019, when COVID-19 wasn’t a factor.
Signet’s total sales for the quarter were $1.8 billion, an increase of more than $900 million from last year, and a $423 million increase from the same period in 2019.
While in the past the company forecast that third-quarter comps would fall 3% from the prior year, it now expects them to grow 1%.
“Our view of the back half [of the fiscal year] is more positive than it was a few months ago, particularly for the third quarter,” said CEO Gina Drosos (pictured) in a conference call following the release of Signet’s financial results. “We are seeing a delay in the anticipated shift of spending toward travel and experiences, which we believe is primarily related to the COVID delta variant.”
Signet is still remaining “conservative” with its fourth-quarter forecast, primarily due to “macro uncertainty,” Drosos said.
The quarter’s sales increase came from both e-commerce and brick-and-mortar sales. E-commerce sales totaled $336.2 million in the period, a 24.5% increase from the previous fiscal year, and a 114.3% increase from two years back. Brick-and-mortar sales rose 130.8% from the prior year and 27.5% from the year before that.
Drosos spent most of the conference call discussing consumer trends and how Signet is responding to them:
• As consumer confidence has increased, particularly among millennials and high earners, the company has begun offering higher-quality pieces at higher price points.
• It’s seen greater self-purchasing, among both men and women who “are seeking ways to express themselves by spending discretionary dollars on better quality pieces that both hold their value over time and reflect their personal style,” Drosos said.
Drosos cited the new Serena Williams collection now available at Zales as a line that has garnered “strong initial customer response.”
• Signet has seen a “rising tide of engagements,” with an estimated 2.3 million couples planning to get engaged this year, an increase in the “high single digits” compared to a standard year, Drosos said.
• The company is also expanding its service offerings, which it hopes to grow into a “billion-dollar business.”
“Not only do services carry higher margins, they are strategic as they drive trust and long-term relationships,” said Drosos. “Trust is key when a customer hands us a treasured piece of jewelry to repair, or when they ask us to safely pierce a part of their body.”
Drosos said that stores with Jared Foundries, Signet’s new customization service, have delivered roughly 10% better sales than stores without them. The company plans to have the Foundries in more than 70 Jared locations by the end of this fiscal year.
• Signet is also pushing Jared more “toward the higher end of the mid-market, or what we refer to as ‘accessible luxury,’” she said.
• The company had already rebranded 100 Piercing Pagoda stores as Banter by Piercing Pagoda and brought that number to 200 last month.
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